China’s General Administration of Customs, released a report stating that the country’s goods trade surplus for the first 11 months of 2025 reached approximately $1.08 trillion, surpassing the $992 billion full-year total from 2024 and marking the first time it has crossed the $1 trillion threshold.
This surge occurred despite intensified U.S. tariffs under President Donald Trump’s administration, which have slashed direct exports to the U.S. but failed to curb China’s overall export dominance.
Exports rebounded sharply by 5.9% year-over-year to $330.3 billion, exceeding economist forecasts, while imports grew a modest 1.9% to $218.6 billion.
This yielded a monthly surplus of $111.7 billion—the highest since June. Cumulative exports hit $3.38 trillion up 6.5% from 2024, while imports reached $2.30 trillion up 4.1%. The resulting $1.08 trillion surplus reflects China’s export machine outpacing sluggish domestic demand.
Analysts from Capital Economics forecast the 2025 surplus could climb to $1.23 trillion, equivalent to over 1% of global GDP, driven by sustained manufacturing strength. The U.S.-China trade war, escalated in 2025 with tariffs on key sectors like electronics, machinery, and electric vehicles (EVs), has indeed hammered bilateral trade.
Exports to the U.S. plummeted 29% year-over-year in November alone, contributing to a broader annual drop of around 20%. However, China has adeptly pivoted: Shipments to the European Union surged 14.8%, Australia 35.8%, and Southeast Asia 8.2% in November of 2025.
Emerging regions like Latin America and Africa have also absorbed excess capacity. EVs, solar panels, and machinery led the charge, with China overtaking Japan as the world’s top car exporter projected 6+ million units in 2025. Manufacturers preemptively “front-loaded” shipments before tariffs bit harder.
Beijing’s focus on advanced manufacturing and export subsidies, outlined in October’s high-level meeting, has bolstered competitiveness. The yuan’s relative stability has further aided pricing power abroad.
This resilience underscores a key irony: U.S. tariffs, intended to rebalance trade, have instead accelerated China’s global footprint, flooding non-U.S. markets and straining relations with allies like the EU and France, where leaders like Emmanuel Macron have warned of potential countermeasures.
The surplus bolsters China’s foreign reserves now over $3.3 trillion and supports the 5% GDP growth target, but it highlights overreliance on exports amid contracting factory activity eighth straight month in November. Upcoming policy signals from the Central Economic Work Conference could emphasize domestic demand to “wean off” this dependency.
America’s trade deficit narrowed to $59.6 billion in August 2025 down from prior peaks, but the influx of cheap Chinese goods risks job losses in manufacturing hubs like Germany and Japan. It also amplifies calls for a stronger renminbi to address imbalances.
With Trump’s tariffs set to persist into 2026, expect heightened scrutiny at forums like the WTO. Economists warn this could echo pre-2008 crisis dynamics, where China’s surpluses then ~$300 billion fueled global tensions.
In essence, China’s $1 trillion surplus isn’t just a number—it’s a testament to adaptive industrial might outmaneuvering protectionism, reshaping supply chains and trade alliances in the process. If trends hold, 2026 could see even steeper imbalances unless multilateral efforts gain traction.
EVs, alongside batteries and solar panels, accounted for a significant portion of the 6.5% year-over-year export growth, driven by overcapacity, subsidies, and aggressive market diversification. While U.S. tariffs—now at 100% on Chinese EVs—slashed bilateral trade, they inadvertently boosted China’s global EV footprint, flooding emerging markets and straining Western competitors.
By November, BYD alone shipped a record 131,935 vehicles overseas, a 325.9% jump from November 2024, pushing the company’s monthly NEV sales to 480,186 units. EV exports generated over $36.7 billion in 2023, with 2025 values exceeding $20 billion to Europe alone through mid-year.
Globally, China captured 40% of EV exports in 2024, a share that held firm into 2025 despite tariffs. This sector’s strength helped offset a 20% drop in U.S.-bound goods, with EVs leading the “sectoral boom” in machinery and green tech.
Tariffs escalated to 100% on Chinese EVs in May 2025 from 25%, plus 25% on auto parts and batteries, rendering direct exports unviable. U.S. imports from China fell from $388.8 million in 2023 to negligible levels in 2025, displacing just 2% of U.S. EV imports historically.
Trump’s April 2025 global auto tariffs 25% on imports, including from Mexico to curb trans-shipping further tightened the noose, prompting warnings of a 793,000-unit drop in global light-vehicle sales in 2025. China responded with rare earth export controls and blacklisting U.S. firms, but held off on full retaliation to preserve export momentum.
This tit-for-tat has inflated U.S. EV prices by up to 40% in simulations, slowing adoption while benefiting domestic players like Tesla though its China-made exports to the U.S. are minimal. China’s EV makers pivoted swiftly, accelerating pre-trade-war trends.
Africa saw a 184% import surge to over $1 billion in 2025, with EVs and solar panels disrupting local industries in Nigeria and Algeria. Latin America absorbed 85% of sales growth in emerging economies outside China, fueled by affordable pricing.
Southeast Asia’s exports rose 8.2% overall, with production shifting to Vietnam and Indonesia up 23% and 29% in trade volumes to bypass tariffs. Despite EU tariffs up to 45% provisional in 2024, with minimum price talks ongoing, Europe took half of China’s EV exports since 2018, valued at $20 billion in 2025.
Canada joined with 100% tariffs, prompting China’s first use of its Foreign Trade Law for countermeasures like canola probes. Overall, 14 countries spent $1B+ on Chinese EVs in 2025. Firms like BYD and Leapmotor relocated assembly to Mexico and Thailand, though this risks “circumvention” probes.
EVs helped China project 6+ million car exports in 2025, overtaking Japan as top exporter and supporting 5% GDP targets. However, overreliance risks deflation factory activity contracted for eight months and subsidy cuts in the 2026 five-year plan.
Battery exports hit 81.2 GWh in H1 2025 up 36.5%, with LFP tech dominating 40.9% of shipments. Tariffs disrupted supply chains, raising costs for U.S./EU manufacturers reliant on Chinese batteries. This echoes 2008 imbalances, fueling WTO disputes and EU calls for carbon tariffs.
Emerging markets gain jobs but face infrastructure strains; Western auto unions warn of 1 million job losses. With Trump tariffs persisting into 2026 potentially 60% universal, analysts forecast a $1.23 trillion surplus but predict EV export cooling to 10% growth if third-country probes intensify.
Beijing’s October policy push for advanced manufacturing could sustain the edge, but domestic demand stimulus is key to avoiding a “chaotic” global trade scene. In short, U.S. tariffs walled off one market but unlocked others, turning China’s EV overcapacity into a $1T surplus weapon.
This adaptive strategy has accelerated the global energy transition—albeit unevenly—while heightening tensions that could redefine alliances at forums like the WTO. If unaddressed, it risks broader protectionism, but for now, China’s EV juggernaut rolls on.
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